Top Indian Companies: Cipla Limited

Cipla Limited is an Indian multinational pharmaceutical company, headquartered in Mumbai, India.

Cipla primarily develops medicines to treat respiratory, cardiovascular disease, arthritis, diabetes, weight control and depression; other medical conditions. The company is part of Nifty 50 index and has a weightage of 0.69% on the index.

It was founded by Khwaja Abdul Hamied as 'The Chemical, Industrial & Pharmaceutical Laboratories' in 1935 in Mumbai.

Led by the founder's son Yusuf Hamied, a Cambridge-educated chemist, the company provided generic AIDS and other drugs to treat poor people in the developing world. In 1995, Cipla launched Deferiprone, the world's first oral iron chelator.

In 2001, Cipla offered medicines (antiretrovirals) for HIV treatment at a fractional cost (less than $350 per year per patient).

Products and services

Cipla sells active pharmaceutical ingredients to other manufacturers as well as pharmaceutical and personal care products, including escitalopram oxalate (anti-depressant), lamivudine, and fluticasone propionate. They are the world's largest manufacturer of antiretroviral drugs.

In July 2020, the company announced the introduction of Gilead Sciences' remdesivir under the brand name CIPREMI in India after reaching a voluntary licensing agreement with parent company and DCGI approval for "restricted emergency use" in COVID-19 treatment of critical confirmed patients.

Operations

Cipla has 34 manufacturing units in 8 locations across India and a presence in over 80 countries. Exports accounted for 48% ₹4,948 crore (equivalent to ₹71 billion or US$940 million in 2020) of its revenue for FY 2013–14.

Cipla also cooperates with other enterprises in areas such as consulting, commissioning, engineering, project appraisal, quality control, know-how transfer, support, and plant supply.

In the late 1960s, Cipla began manufacturing a new, patented drug, propranolol, without the permission of the drug's patent holder, Imperial Chemical Industries (ICI), which protested to the Indian government.

Shareholding Pattern

The Shareholding Pattern page of Cipla Ltd. presents the Promoter's holding, FII's holding, DII's Holding, and Share holding by general public etc.

Holder's Name No of Shares % Share Holding

No of Shares 806790214 100%

Promoters 114897947 14.24%

Foreign Institutions 195463457 24.23%

Banks/Mutual Funds 105568920 13.09%

Others 16369945 2.03%

General Public 128193400 15.89%

Financial Institutions 67217489 8.33%

Foreign Promoter 174907187 21.68%

GDR 4171869 0.52%

FY2023 Q4 and Full Year Results

Cipla said its consolidated net profit increased by 45 per cent to Rs 526 crore for the fourth quarter ended March 31, 2023, driven by robust sales across the domestic business and US market.

The Mumbai-based company had reported a net profit of Rs 362 crore for the January-March quarter of 2021-22 fiscal.

Total revenue from operations rose to Rs 5,739 crore for the fourth quarter as compared with Rs 5,260 crore in the year-ago period, Cipla said in a regulatory filing.

For the year ended March 31, 2023, the drug maker reported a consolidated net profit of Rs 2,802 crore as against Rs 2,517 crore in FY22. Total revenue rose to Rs 22,753 crore last fiscal as against Rs 21,763 crore in 2021-22 fiscal.

"In FY23, we recorded the highest ever revenue with EBITDA crossing Rs 5,000 crore for the first time. Our One-India business continued the double-digit trajectory growing at 13 per cent ex-Covid during the year led by branded prescription and sustained growth across our acute and chronic therapies," Cipla MD and Global CEO Umang Vohra noted.

The company's continued focus on differentiated portfolio has strengthened its US business which posted highest ever quarterly revenue at USD 204 million and USD 733 million for FY23, he added.

"Adjusting for covid, our core operating profitability continues to be strong at 23 per cent expanding by 100 bps over last year. We are excited for the upcoming year, where we look forward to deepening our leadership in branded markets and expanding our differentiated pipeline in the US," Vohra noted.

The company said its board has recommended a final dividend of Rs 8.50 per share of Rs 2 each for the financial year ended March 31, 2023.

Shares of the company were trading 0.73 per cent down at Rs 936.80 apiece on the BSE

Brokerage Outlook-

Brokerage, Elara Capital expect a 22% CAGR in US revenue over FY21-24E to USD 1bn by FY24E. reiterate Buy with a TP of INR 1,135 The US sales run-rate is improving while performance across segments in India is robust.

Elara Capital retain our EPS estimates for FY22 and trim our FY23E EPS by 4% due to higher R&D investment. Brokerage expect a revenue CAGR of 13%, an EBITDA CAGR of 18% and a PAT CAGR of 24% over FY21-24E.

Given earnings sustainability, better visibility in the US and robust free cashflow generation, Elara Capital reiterate Buy with a TP of INR 1,135 on 20x (unchanged) FY24E P/E, including INR 30 for gRevlimid NPV.

ESG

Cipla’s robust digital data management system strengthens our environmental performance monitoring and analytics. Resource consumption and waste generation data is entered on the platform.

Energy management is critical to the natural capital agenda at Cipla. Energy consumption is one of the largest sources of GHG emissions, while energy costs have a direct impact on the cost of operations.

We undertook several initiatives to reduce our energy footprint with active participation of cross-functional teams across locations.

We have also made capital expenditure in energy conservation initiatives such as adopting new technologies, retrofitting existing assets (VFD in drives, EC in AHU, among others), and optimising process area equipment. Through these investments and technological enhancements in processes and utilities, energy consumption has reduced by 2% over the previous year.